Octane verdict a ‘victory for the entire industry’

Rudy Telscher, head of litigation at Harness Dickey, in front of the Supreme Court building

Sometimes, when you are getting dressed for work, you are just hoping to get through the day. Other times, you know that what you are doing that day has a chance to impact the course of national law. At least, you do if you are Rudy Telscher, head of litigation at Harness Dickey, and you are arguing a case in front of the Supreme Court. Telscher argued Octane Fitness vs. Icon Health, a case that stands to have a significant impact on the future of patent litigation in the United States.

This was Telscher’s first oral argument in front of the highest court in the land, but he had been preparing for three months, and studied thousands of cases. He knew that, unlike in an appellate court where the attorney just wants to win the appeal, a Supreme Court case has the chance to change the law itself.

The Octane case is one of several intellectual property cases that the Supreme Court is hearing this term. Telscher sees it as “A perfect storm. It’s the correct political climate, with bills before Congress and weak patent cases brought by trolls that cost billions.” He cited Apple’s amicus brief, which noted that the standards for fee-shifting were so tough that there were virtually no attorneys fees awarded in patent cases, a fact that patent trolls use to game the system.

Telscher was well prepared for the questions from the justices, though he noted that the first justice asks the toughest question you can imagine, with the other justices ask the next toughest questions. He noted that Justice Kennedy referred to the case as a “battle of adjectives” as the Court sought to pick the right words to use in the new standard for fee shifting.

In terms of the decision, Telscher saw it as a “slam dunk across the board,” noting that, in light of the Octane decision, district courts now have more discretion to decide if a plaintiff in a patent case was too aggressive, and if the huge cost and burden of defending the case should result in the awarding of attorney’s fees.

In pursuing the case, Octane Fitness was aided by the Intellectual Property Insurance Services Corporation (IPisc). IPisc’s president, Robert Fletcher, played a key role in connecting the fitness company with Rudy Telscher. IPisc insures patents and products against infringement, helping select counsel when necessary. He notes that Telscher is one of the “go-to people” that IPisc recommends, and, after the 9-0 decision in the Octane case, Fletcher sees potential changes in the IP insurance industry. He notes that Lloyd’s of London is ready to launch a patent troll insurance policy, and expects that announcement in June.

As for the fallout of the case, Telscher sees it as a “huge victory for the entire industry,” noting that there were 15 amicus briefs filed in support of Octane, including briefs on behalf of Google, IBM, Apple and other tech giants. “This tells you a lot about how bad these companies thought the system was,” Telscher says. “It was a big victory against bad suits… a big victory for the US economy and industry.”

As for the future of patent reform, Telscher believes that “Congress needs to be very careful about fee-shifting provisions, which could have a chilling effect on small and medium businesses.” Fletcher agrees, echoing the words of former United States Patent and Trademark Office director David Kappos, who, as advisor to the Partnership for American Innovation advocates for “smart reform.”

In the end, the case was a win for Octane, certainly, and it remains to be seen how often attorneys fees will be awarded. One thing is certain, though: Telscher will remember the case, and not just because it was his first oral argument in front of the Supreme Court. Before he was about to give his rebuttal arguments, a protestor was escorted from the court by the Secret Service. It marked the first time a camera had been snuck into the court. So, not only was the case a historical one for the intellectual property industry, it was historic in a way that Telscher’s teenage daughter described as “pretty cool.”